State of Mind - Startup Germany


Author: KERSTIN BOCK, Openers



In many ways, 2018 might become the most mature year yet for Germany’s startup ecosystem: positive indicators are the continuous growth of venture capital in the market as well as several IPOs in 2017 with many more anticipated in 2018. This year will also prove to be an exciting ride with Germany being a leading pioneer in many technological trends, such as blockchain and artificial intelligence (AI). These trends bring with them not only tremendous business opportunities but also a compelling set of ethical and administrative challenges. 

Regulation is emerging as an opportunity for competitive advantage – Europe’s tech community has a broad agreement prioritizing regulatory changes that incentivize the development of AI, blockchain, and autonomous vehicles. The biggest opportunity could be blockchain with $1.75 billion already raised in Europe via ICOs, compared to $1.08 billion in the US. GitHub lists the most active blockchain developers as being from the UK, Germany, and Russia. At German Haus we will invite experts from all over the industry to discuss these trends and opportunities, along with their take on advancements made in Mixed Realities and IoT, as well as in the creative industries.

Furthermore, Deep Tech continues to thrive in Germany. In 2017, Europe was on track for a record $3.5 billion to be invested in Deep Tech, a 40% increase compared to 2016. Startups are leading the pack and raising high hopes, such as the Munich-based flying taxi company Lilium with their $90 million investment in 2017. Germany has also continued to take on a uniquely collaborative approach to working with traditional industries. In 2017, there were over 100 funding rounds involving at least one corporate investor, a 600% increase compared to 2012. This is consistent with a general trend in Europe; around 20% of all venture funding now comes from corporations, as stated in the recent report “State of European Tech”, released by Europe’s largest VC fund Atomico and the tech festival Slush. Europe is building a tech ecosystem in its own right by combining technological brilliance with deep industry know-how. We have seen this in the finance industry, but it is now spreading to healthcare, logistics, transport, and beyond.

The report also states that as European tech strengthens, a battle royal for tech talent is being waged across the continent – professional developer numbers have increased to 5.5 million. The UK remains the number one destination for tech talent migrating into (and within) Europe, but it appears to have lost a fair share to other European destinations such as Germany. The expected flow of UK and US companies into the German market after Brexit and the elections is yet to be realized – the first companies may have relocated their offices, but the numbers are not yet indicative of a significant trend. However, it’s still early. The second week of January brought us Softbank’s $558 million investment in Auto1, which now makes the Berlin-based company the highest-valued startup in Europe after Spotify. If this is an omen, it’s going to be an exciting year for Startup Germany.

Unexpected news could be just around the corner!